The Break Even Stop is a Psychological Crutch for Newbies

[cornix]

Very much so. Thank you for the question.

Thanks for answering. That's a very interesting precedent in light of endless TA validity discussions.

 

[profitlocker]

B1S2,

Are you an intraday trader? What method do you use (retracement, momentum)?

 

[Buy1Sell2]

B1S2,

Are you an intraday trader? What method do you use (retracement, momentum)?

Position trader. Trend follower.

 

[profitlocker]

Position trader. Trend follower.

No offense, but you keep spewing that SL's should be placed outside the noise, but that's not how intraday momentum trading works. When you have a catalyst moving an instrument, yesterdays noise doesn't mean squat, and today's noise is isn't even readable at the open. The open is where some of the most aggressive traders (including me) seek profits. I do move my SL's to break even after the instrument has traveled 1/2 way to my target. Based on my testing and research, this is the most profitable. Allowing more breathing space erodes my profits. An instrument in a state of motion tends to remain in motion. I'm not sure you have a true grasp of market mechanics

 

[Buy1Sell2]

No offense, but you keep spewing that SL's should be placed outside the noise, but that's not how intraday momentum trading works. When you have a catalyst moving an instrument, yesterdays noise doesn't mean squat, and today's noise is isn't even readable at the open. The open is where some of the most aggressive traders (including me) seek profits. I do move my SL's to break even after the instrument has traveled 1/2 way to my target. Based on my testing and research, this is the most profitable. Allowing more breathing space erodes my profits. An instrument in a state of motion tends to remain in motion. I'm not sure you have a true grasp of market mechanics

Thank you for you posting! Yesterday's noise is very important to today's trading however. Once the open has passed, then trading opportunities present themselves and a reference to today's noise can be added in as well. Trading at the open is not a great time to trade. It's better to watch the market a bit and then trade. A lot of folks think that trading at the open is great, but a lot of money is lost by newbies who end up chasing--much like right after the jobs report etc. --Congrats on your success on the openings.

 

[profitlocker]

Trading at the open is not a great time to trade

What world are you living in? Buying/Selling the opening price is what newbies do. Getting a read on the open and trading it is what many professionals do. The volume and volatility is ideal for momentum trading. I do agree that most people are scared to execute during this time. This is what separates the men from the boys

 

[deaddog]

A lot of folks think that trading at the open is great, but a lot of money is lost by newbies who end up chasing--

Isn't that the objective of trading? Taking money from other traders.

 

[Buy1Sell2]

Isn't that the objective of trading? Taking money from other traders.

You could look at it that way. My point is simply that most people should not be trading the open. I hope that better states it.

 

[Buy1Sell2]

Break even stops are the worst thing you can do.


Only when the trade has already some profit you can use a break even stop. But this break even stop cannot be used as long as your "guideline" tells you that the direction is still good.

So after initiating a trade you should follow your "guideline" and only later your break even stop.

But wouldn't that breakeven stop need to be outside the noise? --Not just once there is a level of profit?

 

[Sergio77]

Break even stops protect equity from sudden reversals and are useful but they should be placed when it is safe to do so after making sufficient gains. In the markets we have with many robot algos they are a must.